Dynamic Perspective of Capability Development in Organizational Learning - from Absprotpvie Capacity to Combinative Capability-

Abstract

Since learning and knowledge have been regarded as key factors for business innovation, many scholars focus heavily on firms ability to learn and utilize knowledge: absorptive capacity (Cohen and Levinthal, 1990

Zahra and George, 2002) and combinative capability (Kogut and Zander, 1992

Grant, 1996). However, despite of growing use of the constructs, the proliferation of these two capabilities brought two challenges to be handled: conceptual overlap between two concepts, and lack of explanation about dynamic process of capability development.

Based on literature review about learning capabilities, this paper finds that the overlap between absorptive capacity and combinative capability can play a potential role on bridging two concepts, and offer a combined framework. First, in terms of overlapping part, this paper finds that the similarity and differences between two concepts can explain the gap between exploration to exploitation. Second, the combined framework depicts the development of learning capability according to handling knowledge. However, this paper sees that the capability development should be consistent with the knowledge management process after acquisition of external knowledge so, the framework describes that the importance of capability changes from absorptive capacity to combinative capability as a firm excels in handling knowledge. That is, this research argues that knowledge management process of knowledge recipient can be explained through the combined framework of absorptive capacity and combinative capability. In this framework, the research arranges the capabilities which require the process from exploration to exploitation according to the extent which knowledge is disassembled, and offers detailed description about each capability.

Moreover, the research attempts to connect between firms growth stages and the development of organizational capacity through longitudinal case study of POSCO. Based on the five-stage model (Miller and Friesen

1984), the history of POSCO was divided into four stages of the five-stage model, and analyzed from capability development perspective. The case study gives two implications: theoretically, the case study shows the offered framework can effectively analyze the development of the firms organizational learning. Empirically, the case study represents the process that knowledge learner becomes knowledge creator in industry, as the firm is matured.

The contribution of this research lies in helping to understand three points

first, by distinguishing the differences and similarities of absorptive capacity and combinative capability, it gives clear understanding about these two seemingly different concepts. Second, by offering combined framework, it helps to understand the knowledge management process, starting from knowledge exploration to exploitation from knowledge recipient perspective. Third, by offering the case study, the research gives insights about the relationship between firms growth stages and the development of organizational capacity, and elicits propositions about the dominance of specific learning capability at each stage